OBJECTIVES

Outcomes-based contracts (OBCs) between payers and providers offer payers the opportunity to provide new, potentially high-cost treatments at low financial risk (due to rebates, if the expected outcomes are not achieved), while incentivizing industry to improve treatments. Our goal was to provide an analysis of OBCs currently in place and published perceptions of the future of OBCs.

METHODS

We used structured Google/Medline searches to identify articles/white papers/presentations on US outcomes-based contracts (OBCs) in the last five years. Search terms included “outcomes-based contracts”, “value-based pricing”, or “risk-sharing agreements” in combination with “pharma” and “US”.

RESULTS

We identified 20 existing OBCs (on 15 treatments) and 21 sources on the future of OBCs. The OBC drugs were primarily for cardiovascular conditions, and hepatitis C, and involved 11 pharmaceutical companies and eight payers. Press releases indicate that contracts can result in preferred or exclusive formulary position to manufacturers and can offer benefits like outcomes-based rebates or fixed spends to payers. The future of OBCs is considered to be hampered by the one-dimensional nature of standard pricing models, the challenges of data collection and the Medicare/Medicaid best price strategy. Some sources claim that there has been a recent decrease in implemented OBCs. Models for payment and delivery methods other than OBC (e.g. bundled payments or annuity models) are under consideration.

CONCLUSIONS

OBC is being chosen primarily for disease areas which are growing public health issues with a considerable impact on healthcare budgets, like cardiovascular disease and diabetes. Innovative payment and delivery models like OBC are most likely to be adopted in areas where conventional solutions are ineffective. The uptake of OBCs has not increased in line with expectations. Unless the hurdles which impair their effective implementation are addressed, they will not deliver on their promise and will remain a niche solution in healthcare.